The Kremlin’s unexpected move this week to replace ministers with independent directors at the boards of state companies could lead to further political uncertainty ahead of presidential elections next year.

Russian President Dmitry Medvedev said top officials, including Russian deputy prime minister and chairman at state oil champion Rosneft, Igor Sechin, ought to step down from their respective board seats at state companies.

Although a shock to both government officials and investors, Mr. Medvedev’s move is consistent with the broader call for modernization of the economy amid a $35 billion privatization program.

Critics, however, say that it takes more than board room changes to limit the state’s strong involvement in the economy over the past decade, which effectively has replaced the powerful and super-rich oligarchs that emerged in the 1990s with government bureaucrats.

“The merger between the Russian political elite with the boardrooms of strategically important state-owned companies has essentially introduced a new type of oligarchy, which has deteriorated the business climate,” said IHS Global Insight’s Lilit Gevorgyan.